Progressing with the efforts to streamline its business portfolio, Myers Industries Inc. ( MYE ), has agreed to sell its Lawn & Garden business to a unit managed by Wingate Partners V, L.P. The Dallas, TX-based private equity firm will pay $115 million for the business.
The company expects the deal to close in early 2015, following the fulfillment of customary conditions and the receipt of necessary regulatory approvals. Other financial terms of the deal were not undisclosed.
Myers had initiated the sale process of its Lawn & Garden business on Jun 2, 2014, as part of its strategy, which involves simplifying its business portfolio that focuses on expansion of its leadership position in the Material Handling Segment while preserving a strong market position in the Distribution Segment. Since then, this segment forms a part of the company's discontinued operations.
Other recent actions taken in the direction of streamlining its business portfolio include WEK Industries Inc. in Jun 2014 and the acquisition of Scepter Corporation and Scepter Manufacturing, LLC (Scepter) in Jul 2014.
The Scepter acquisition marked an important step toward the company's long-term strategic growth and profitability improvement plan for the Material Handling segment through expansion of product assortments as well as its global reach. This was the company's third bolt-on acquisition in last two years to increase productivity of the Material Handling Segment.
The benefits of the Scepter acquisition were clearly reflected in the company's third-quarter fiscal 2014 results, with net sales improving 14.6% to $162.1 million. Simultaneously, the company's Material Handling segment posted a 25% rise in net sales to $112.3 million on the back of the Scepter buyout.
We believe this Zacks Rank #3 (Hold) company is moving in the right direction with regards to its strategy of focusing on its key strengths and eliminating its underperforming businesses in order to position itself for long-term growth.
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